Qatar seeks to diversify income sources by investing more abroad

Qatar’s growing investments in foreign markets is part of the country’s strategy to diversify its income sources and protect its shield its economy against possible fall below expectations of oil and gas prices, economic experts told AlArabiya.net.

The economic crisis that has struck several countries in the European Union in particular has unveiled suitable investment opportunities for wealthy states, such as Qatar.

The tiny rich Gulf state, of about 1.9 million people –more than 80 percent of whom are foreign expats –and an estimated GDP per capita of $104,000, invested in foreign markets 20 billion in 2010 and about $ 30 billion in 2011.

Hussein al-Abdullah, executive board member of the Qatar Investment Authority, has predicted the country’s investments abroad to reach more than $ 30 billion in 2012.

Part of Qatar’s recent major investments abroad include London’s Shard Tower, a 3 percent stake in French oil giant Total, a 5-billion investment in the China’s stock market, the purchase of the building that houses Le Figaro newspaper in Paris, and the purchase of a 6 percent stake in Iberdrola, Spain’s biggest power utility.

Economic expert Nasser al-Shafi, told AlArabiya.net that Qatar is moving towards foreign investment for three reasons; to diversify its investment, increase revenues from investment opportunities, and promote national economy.

“Europe is suffering from a recession and seeks to attract foreign investment and Qatar is among the countries who could grasp such opportunities.”

Al Shafi said that it’s hard to predict the future of Qatar’s investments outcomes, “investments are evaluated only after five years, but I expect that the results are fruitful because the state is choosing carefully their investment opportunities.”

Shafi said he expects Qatar to increase its investments in the Arab spring countries, such as Tunisia, Libya, Egypt and Syria.

Meanwhile, Mohammad al-Haidoos, an economic analyst, also said that Qatar’s objective in raising its investments abroad is to diversify its sources of income, a strategy he said is necessary for the country’s future.

Al-Haidoos has also attributed growing Qatari investments in Europe to the economic recession, pointing out that the Gulf state has diversified foreign investment between real estate, tourism and sports in order to ensure profit.

He expects Qatar to continue investing in foreign markets, saying, “I think Qatar will continue its trend on foreign investment as it looks for other sources of income other than oil.”